P-I-T-Y!  I mean really, Bro… too bad.

You are missing out on THOUSANDS of dollars! People who OWN a home, get tons of deductions you don’t… just for living in a HOME!  Haven’t you ever heard the saying, “Buy a House Get a Raise!”

Mortgage Interest Deduction:

You may not deduct interest on more than $1,000,000 of home acquisition debt for your main home and secondary residence. Home acquisition debt means any loan whose purpose is to acquire, to construct, or substantially to improve a qualified home. The limit is reduced to $500,000 if you are married filing separately.

Use the worksheet on page 11 of Publication 936 to calculate the allowable mortgage deduction.

Mortgage Rates are L-O-W! It does not look like this is going to continue to be the case, as “Big Ben” (and the Fed) announced he is going to stop purchasing Mortgage Backed Securities in March (which will force rates higher).

The Government is G-I-V-I-N-G you a tax credit of $8000 or 10% of the home’s value. If you are a First Time Home Buyer! So if you buy a really nice $250,000 house—that’s $8,000 for furniture, pay off your college loans, buy a car, big screen TV… or to just plain ole save!  $8,000!!!

There are a couple of restrictions / things to remember:

• Some States are helping the Tax Credit to be used as a down payment.  Unfortunately, the State of North Carolina does not have the funds to be able to offer this grant program.

• Homes that cost more than $800,000 aren’t eligible for the credit
• You must be over 18 years old to claim the credit (dependents are not eligible to claim the credit either).
• Those who sell their new home or stop using it as their main residence within three years would have to repay the credit.
• You cannot claim the credit if acquired your home by gift or inheritance OR if you acquired your home from a related person.

If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount allocated cannot exceed the smaller of $8,000 or 10% of the purchase price. Note: A reasonable method is any method that does not allocate all or a part of the credit to a co-owner who is not eligible to claim that part of the credit (I would go with 50/50 as a reasonable method if one person is not eligible for the credit)

The way you determine which credit you are eligible for is based upon the purchase date. Only homes purchased from Jan 1 2009 to April 1st 2010 are eligible for the fully refundable $8000 credit.

If you constructed your main home, you are treated as having purchased it on the date you first occupied it.

Foreign or Overseas Homes: You are considered a first time home buyer when buying an American residence, even if you owned principal residence outside of the United States within the previous three years. Non-resident alien’s cannot claim the credit. In addition to this, in order to qualify for a mortgage – you must have a two year US Credit History (FNMA and FHLMC changed rules in December of 2009).

Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit.

An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and close on that purchase by June 30, 2011.

For more details on the Tax Credit and Frequently Asked Questions, click here.

First Time Home Buyers should purchase a home NOW, because houses are CHEAP, mortgage interest rates are LOW, and the Government is GIVING YOU up to $8,000!!!  WOW!

If you have questions about buying a home in RTP, or want to get pre-qualified for a mortgage loan in Raleigh NC, please contact Steve and Eleanor Thorne, First Financial Services, Inc in Cary, NC  919-649-5058

FHA / HUD does not make loans, they only insure them. It’s one of the BEST programs available to first time home buyers!  Yes, there are people who are defaulting on loans… at a rate of around 9%… But that’s roughly what Un-employment is right now.

This is not an underwriting problem, meaning just tightening the underwriting guidelines will not make the default rate for FHA Mortgages go down!  We need more jobs!

If you want to learn more about FHA Mortgage Loans – please call Eleanor and Steve Thorne, First Financial Services, 919-649-5058

Are we going to Force Green Living?

President Obama, and most of the rest of us are thinking Green is Good, and in an Executive Order issued earlier this month, he required that all Federal Agencies must do everything possible to:

“increase energy efficiency; measure, report and reduce their greenhouse gas emissions from direct and indirect activities;… eliminate waste, recycle and prevent pollution…”

No Federal Agency, no Fannie or Freddie have put requirements on homeownership at this point – however it does cause one to pause.  How far do we go?

HUD is required to report back to the White House it’s Greenhouse Gas Emmission reduction suggestions by January.  Since there is pressure to show large increases in energy efficiency and corresponding decreases in pollution and greenhouse gas emissions…  could this move HUD toward imposing “green” standards on federally-assisted programs like FHA?

How else is the Department going to show  significant reduction efforts?

I think I’d keep this on the Radar.  This could have a HUGE impact on HUD programs, especially FHA single-family and multifamily insurance programs! Think the Minimum Property Standards could be changing??

Lead Paint – move over!  We could be requiring additional insulation, solar hot water heaters, upgraded windows!

If you are considering a purchase in Cary or Raleigh, NC and want to talk about being pre-qualified, please call Steve and Eleanor Thorne, 919-649-5058

If you found this post, you have a very specific question, and the very SHORT answer, is PROBABLY.

Exactly what type of mortgage you get, is a slightly more detailed answer!

VA LOANS:  VA says that if you are going to purchase with another person they will recognize legally married spouses of qualified veterans as co-signors on VA loans.  Otherwise, the other person on the mortgage loan must be another qualifying veteran.  For more information on this VA guideline, please click here.

USDA:  The Rural Development program of the USDA (the housing program for rural areas) uses household income to qualify.  They do NOT have a guideline that says you must be legally married for the spousal income to be considered in qualifying for the mortgage. It’s an important piece of the puzzle when qualifying for a USDA home loan.  Because USDA is looking at overall “household income,” you might have someone in the house who is contributing to the groceries (for instance) but not on the mortgage.  For QUALIFYING purposes (meaning to see if your are OVER the area guidelines) it can put you over the limit.  For NC guidelines for USDA mortgages, please click here.

FHA Mortgages: FHA does not have maximum income limits like USDA… and they qualify folks based upon the income of those who are going to be on the mortgage.  The people on the mortgage do NOT have to be married.  FHA also allows NON-Occupying co-borrower.  ( This program is also referred to as “Kiddie” Condos.”)  The NON-Occupying co-borrower / mom, dad, sister… needs to have adequate credit scores, reserves, income to qualify WITH the borrower.  You lump all hte debts, all the income and qualify together.  Remember, under FHA guidelines,  Non-Occupying co-borrowers will NOT be considered a compensating factor for someone iwth poor credit (unfortunately).

If you are considering a home purchase in NC, and want information regarding Government Financing options, please call Steve and Eleanor Thorne, First Financial Services, 919-649-5058.

When the Great Depression hit in 1929, millions of Americans began to loose their homes to foreclosure. Short term mortgages (3-5 years) and balloon payments were common. The banking crisis during the 1930s forced banks to call in loans, and there were no refinancing options for the average homeowner.

As a result the federal banking system was restructured and in 1934 The National Housing Act was passed. This legislation created the Federal Housing Administration (FHA) with the intent to regulate interest rates and mortgage terms on the loans that it insured. The agency purchased mortgages and insured them, allowing banks to turn around and make another loan without putting out substantial capital of its own.

Today, we have some of the same problems they had during The Great Depression, and that’s one of the reasons the Obama administration is looking at new ways to use FHA mortgage loans to help with the current crisis!  With these changes, many “vague” statements on the Internet about FHA mortgage loans could be wrong… so if you are considering purchasing a home in Raleigh, or refinancing in Cary, NC - please call Steve and Eleanor Thorne at First Financial Services, Inc to get the most up todate information! 919-649-5058

Now all you have to check is your income – to be certain you are not OVER the maximum for the area.  In Johnston County, the maximum income limits for USDA mortgages have recently changed!  The newest numbers are:

1 to 4 persons in the home $86,100
5 or more persons in the home $93,000

The main thing you need to remember when applying for a USDA home loan is that you need to have good credit – and you can not have total debts (with your mortgage payments) of more than 41% of your monthly gross income.

If you have specific questions about USDA Home Mortgage and how you might qualify using this program – please call Steve and Eleanor Thorne, First Financial , 919-649-5058.

Well, if you’re looking to buy a rural home, we can help you learn about the benefits and features of purchasing a home by using the USDA Guaranteed Rual Home Loan.

But if you’re looking to finance a horse farm, you might want to read this first!

The USDA Guaranteed Rural Home Loan program was created to help low to moderate income families buy homes in designated rural areas with 100% financing.  It really provides people with the most cost efficient way to finance a home.

There’s a 2% fee (it’s their form of mortgage insurance) and it’s added to the loan amount.  So if you are borrowing $100,000 you will have your principal and interest payment calculated at $102,000.  There are income limits, and in Wake County a family of four can not make more than $86,100.

The loans are designed for RURAL AREAS… but all of Johnston County, Chatham County and much of the Western Wake County area are open to the Program.

To See Homes That Qualify For this 100% Financing click here!

If you have questions about purchasing a home with USDA in NC, please call Steve and Eleanor Thorne, First Financial Services at 919-649-5058

SAVE UP! For more than 10 years there have been agencies that helped with downpayment.  The downpayment was “gifted” through the agency – and it’s a bit complicated – but it meant that a homebuyer seeking FHA financing could get a 100% loan.  Well, that’s been eliminated with the New Housing Bill.

ALSO – and this is the important part – the downpayment requirements for FHA financing just went to 3.5% effective October 1, 2008.  There’s some question about how FHA is going to calculate that 3.5% – and as those details are available we’ll pass them on – but for the time being, assume that you will need 3.5%.

The seller can still pay your closing costs, and you are allowed to get a gift from a family member!  Now is a GREAT time to buy!  SO SAVE UP!

If you are interested in purchasing a home in Cary, or buying a home in Raleigh, please contact Steve and Eleanor Thorne with First Financial Services, a Mortgage Banker in Cary, NC  919-649-5058

Great News!  The documents needed for a FHA loan are VERY similar to those you would need when applying for most other types of financing these days!  Here’s our “Scavenger Hunt” list!

• Most Recent pay stubs for 1 full month.
• The name, address and telephone number of someone who can verify employment.  (We will be sending them a form to complete)  We will be verifying your income for the last 2 years.
• If either of you are now, or have been self-employed, or earned income OTHER THAN W-2 income in the last two years, we will need full copies of your tax returns.  If you ONLY earned W-2 income, we will need a copy of the W-2s for the last 2 years.
• Any data regarding the relocation package, and specifically what NASA is covering.
• If you owned property, and you’ve sold it, we’ll need a copy of the HUD-1 Settlement Statement.  If you own a property that is leased, then we will need a copy of the lease agreement.  We need to document 2 full years of residence.
  If you’ve been renting during the last 2 years, we will need the name, address and telephone number of the landlord.
• We need copies of bank statements for the last 2 months.  If you are changing banks, remember that we will need to verify the money going out of one account and into another! (PLEASE try not to have any NSFs!)  We will need ALL pages of the bank statements.
• If you are receiving a gift for the your down payment – we will provide you with a gift letter to have completed.  We will also need to verify that the person giving you the gift has the money in their account.  In the event that you, or the donor, do not keep money in a bank – we do have other options, so you will need to speak with us directly about that situation.
• In the event that you do not have sufficient “lines” of credit, we can look at “alternative lines.”  This means that if you have only 1 credit card, and no other credit, we will likely need to use your cell phone, and your insurance (for instance) to establish that you pay your bills on time.  If you think you might be in this situation, please have the last statement available for us.

In every single loan file, there are other items that we might also request… it’s difficult for me to anticipate every different situation… for instance, if you sold a car before moving, and deposited $5000 from that sale – we are going to ask for evidence of the sale… but for the most part… this should be a VERY complete list.

Congratulations on your move, and your new opportunities!  I know this is an exciting time!

If you are considering a home purchase in Garner, or your buying a home in Cary, please call Steve and Eleanor Thorne, First Financial Services, 919-851-3031